Why Democrats And Republicans Are Both Wrong About The Bush Tax Cuts

By Michael Snyder, on December 7th, 2010

All over the Internet, Republican pundits are declaring that extending the Bush tax cuts will save the economy and Democrat pundits are declaring that ending the Bush tax cuts will save the economy. Well, you know what? Nothing will save the U.S. economy. The U.S. government is going to continue to drown in a sea of debt no matter what happens with these tax cuts. State and local governments are also going to continue to drown in a sea of debt. Thousands of factories and millions of jobs are going to continue to be shipped overseas every single year. America is going to continue to transfer tens of billions of dollars of its national wealth to foreign nations every single month. Nothing that the Republicans and Democrats are debating right now is going to do a thing to alter the fundamental problems that the U.S. economy is facing.

Not that I personally do not like tax cuts. I would like my own personal income taxes to be cut down to zero percent please. I will take as many tax cuts as I can personally get.

And it is absolutely undeniable that the federal government is already handed way, way, way more money than it ever should need. Starving the federal monster of cash is a good thing. We need a much, much, much smaller federal government. But the odds of us ever returning to the kind of limited central government envisioned by our Founding Fathers is somewhere between slim and none and slim just left the building.

So aren’t less taxes always good? Well, not necessarily. You see, the federal government is planning to spend much more money in the years ahead. When you combine significant tax cuts with huge increases in spending you get lots more debt.

Extending the Bush tax cuts (and throwing in a few extra ones) will help the U.S. economy in the short-term, but without accompanying brutal spending cuts it will make our long-term debt problems even worse.

But most of our politicians don’t think about the long-term. Most of them just want the economy to turn around in the short-term so that they can get re-elected.

For example, Barack Obama is not completely stupid. He realizes that these tax cuts are probably his best shot at a short-term economic boost. If the economy starts to get back to “normal”, it may be just enough to get him another term in office.

And self-preservation is what most U.S. politicians are most interested in.

Meanwhile, we are heading for a national debt nightmare that threatens to destroy our financial system and plunge us into national bankruptcy.

But if our politicians did attempt to make the brutal spending cuts that would be necessary to balance the budget, most Americans would start screaming bloody murder. The truth is that the American people have become dependent on the government and they like getting their checks, their handouts and their government contracts.

Okay, so what will this deal that Obama has made with the Republicans actually do?

Well, it will extend most of the Bush tax cuts for two years (right up through the 2012 presidential election). The following are some of the details….

*All income levels will continue to be taxed at the lower rates instituted by the original Bush tax cuts. That means that the highest rate will remain at 35 percent.

*Barack Obama claims that extending these tax cuts will save the average American family approximately $3,000 next year.

*The 15 percent rate on capital gains and dividends will be continued.

*As part of the package, Republicans have agreed to a 13 month extension of long-term unemployment benefits.

*One new tax cut included in the deal is a reduction of the Social Security payroll tax by two percentage points for one year. So for a year U.S. workers will be paying just 4.2 percent instead of 6.2 percent. Barack Obama believes that Americans will save $120 billion next year from this tax cut alone. For the average American family, it will mean that they will have approximately an extra $1000 in their wallets.

*The existing $1,000 child tax credit will be extended for the next two years.

*Another tax cut that is new would allow U.S. businesses to immediately expense all business investments in 2011. The Obama administration is claiming that this tax cut would be the biggest “temporary investment incentive” in American history.

*A compromise was reached on the estate tax. There will be an estate tax exemption of 5 million dollars per person and the maximum rate will be 35 percent.

So how much will all of this cost?

Well, all over the Internet the Democrats and the Republicans are arguing over figures.

Today, our national debt is more than 13 times larger than it was just 30 years ago….

So can’t we just “grow” our way out of this debt?

Not a chance.

Reducing taxes and increasing government spending will both stimulate the economy in the short-term, but both of them will always cause government debt to go up.

The sad truth, as I have written about previously, is that it is now mathematically impossible to pay off the U.S. government debt.

If you took every dollar out of every single wallet, out of every single mattress and out of every single U.S. bank and sent it to the government you wouldn’t even make that big of a dent in the national debt.

So can’t the U.S. government just go out and create more money and solve the problem?

As long as the Federal Reserve system exists, the U.S. federal government will be trapped inside a perpetual debt machine.

The best we can hope for is to slow the expansion of government debt down to a reasonable level.

But as I explained in a previous article, it is extremely unlikely that the U.S. government will ever have a balanced budget ever again.

The U.S. government currently has to borrow approximately 41 cents of every dollar that it spends. The spending cuts that would be required to slash that much out of the federal budget would be beyond draconian.

Sadly, the truth is that even the really bad official budget deficit figures severely understate the extent of the crisis that we are facing.

If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of $4 trillion to $5 trillion.

So anyone who thinks that we are just a “tweak” or two from fixing U.S. government finances is living in a world of delusion.

Unfortunately, the years ahead look downright apocalyptic. After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff concluded that the U.S. government is facing a “fiscal gap” of $202 trillion dollars.

But the American people don’t want to hear this. The American people don’t want to hear that there are serious consequences for running up the biggest debt in the history of the world. The American people just want to be told that there are smart people working on the problem and that they are on the verge of “fixing” it.

But it is all a lie. We can keep trying to “kick the can down the road” for a while longer, but eventually a day of reckoning is going to come and it is going to be painful beyond imagination.

Somehow we have the arrogance to believe that our children and our grandchildren should pay back all of the debt that we have accumulated. What we have done to future generations is beyond criminal.

America has enjoyed the greatest party in the history of the world, but eventually it is going to be time to turn out the lights.

For now, however, the Republicans and the Democrats are busy trying to figure out ways that they can keep the party going for a little while longer.

Perhaps they can just slash taxes all the way to zero and the federal government can just borrow all of the money that it needs. At least that way we wouldn’t be endlessly pouring our own money into the financial black hole called the U.S. government.

http://www.formypeople.org again,this explains everything that is about to happen.Read the section labeled DREAMS and tell me this doesnt highlight the unstoppable trend that we are on!!!!

William

Every dollar of revenue lost by extending the tax cuts for those with income over $250k is a dollar that will be borrowed from foreigners, or bought with funny money by the FED. Exactly WHAT do we pay these members of Congress to do, with their annual salaries over $175,000?? There is not even ONE brave soul in the US Congress with the exception of Ron Paul, and the Republicans want him to sit down and shut up. I can see no way out of this mess other than a sharp and unavoidable
decline in the American standard of living. The county poor houses of the earlier part of the 20th century are surely not far away……

Karl

You´re completely right, people don´t care what our children and grandchildren,…… will have to pay. As long as they can still go to walmart, mc donalds, ….. they don´t care what will follow next.
Logical thinking is something that most don´t have in their dictionary.
I live in Spain and there´s over 40% unemployed, between 16 and 25’s. They lived the relaxed Mediterranean life here, and now they´re paying for it, but still don´t see the truth before their own eyes. It´s depressing to see that they really don´t have a clue what´s going on.

flubadub

Another fine essay but I have to disagree with one point. Obama does not operate with an eye toward getting re-elected because he does not wish to serve a second term. Early on in his presidency he made the statement that he’d rather be a good (in his estimation) one term president than a mediocre two termer. Combine that fact with a personality that loves vacationing almost as much as giving speeches, his wife’s reported unhappiness with their situation and his realization that his legacy is assured as the first black president. When he considers that he can sidestep the inevitable mess this country will soon be in, while getting richer as a well paid orator and writer, the White House exit door must be looking better all the time.

There will be no “I shall not seek nor will I accept my party’s nomination for another term” ala Lyndon Johnson. The capitulation will probably occur during the primaries when he will concede that because one of his Democtatic challengers is leading in the poll he will, for the good of the country and blah, blah, blah give the job to someone more capable of keeping his party in office.

Maria

You are right on the mark. Extending the tax cuts only helps the tax payer a little…and only for a little while. Reinstating them will not do a thing to stop the economic collapse.

I’m sick of the whole Republican vs. Democrat paradigm. It’s fake. Both parties are controlled by the same people…the same corporations. The whole system is rigged. No matter who we vote for, the result is always the same…corruption.

It is too late to change the immediate future. It took generations to create this mess, and it will take no less than a generation to fix it. None the less, we must start corrective action NOW, not for ourselves, but for our children. If we don’t, it will be too late to change the future for them as well.

The New World Order is betting that we won’t.

Gary2

At a time when we have so many people hurting and unemployment reported at 9.8% (really much higher) with record numbers of people in poverty that it is even up for discussion to extend tax cuts for the rich is almost surreal. Banana republic! we are doomed.

This is just unbelievable and shows how corrupt the system is. Where are all the tea baggers who are concerned about the impact on the deficit with extending the tax cuts for the wealthy? Oh thats right the Koch brothers told them to not protest this. The baggers are so stupid… Anyone can see that capitalism is a failure and do not please tell me this is not capitalism-it is always the end result of capitalism. It is inherently a corrupt system

Jon

Oh so your a little communist are you? Let me ask you something.Did you comprehend anything that the author wrote? It’s called a FREE MARKET.The free market has never failed except when manipulated by central banks.The free market has been taken away from us by Communists.Communists have been here for 100 years almost to the day.Do your research about the history of free market Capitalism in our country and grow a brain.Communism is when the one percent controls the 99.That’s not your equality that you probably think everyone deserves now is it? You know what’s fair and equal ? Fair and equal is when the people elect one of their own to run the country.They are not above or below the law.Fair and equal is when neither a Liberal elite nor a Neo- Con dictate over the rest of us.Fair and equal is when the people make the decisions not the government.You would not last one hour in a full blown communist society and you would probably cry for mommy all the way to your Gulag.

wewillbeok

Money should not be run by those
who know nothing but money,
who know nothing about create real money but print money and
who think about nothing but money.

Who cares anymore about the debt, why should I. It’s just a bunch of numbers on a computer screen skyrocketing up like Opray Winfrey on a digital scale. Bernanke and the Fed pass out money like Halloween candy to the mega banks, the “foreign” mega banks too, and to companies like Toyota and Harley Davison? Not just “some” money, but secretly giving away about 5 trillion dollars. Then what? I’m supposed to pay for it with torturous austerity measures? I don’t think so. I’m glad unemployment was extended another 13 months, and I’m glad “NO” taxes were raised. Hey government, try downsizing.

alice

I find it hard to believe that our leaders are not looking into our country’s future, and not being terrified about what they see! How can they let this go on without taking some serious action! Lip service is all I hear from every one of them, false promises, postponements, delays, collusion, more debt, deficits!

VegasBob

Let’s see. I have a very low six figure retirement income and because I’m very skillful at exploiting various loopholes that are already in the tax code, my effective Federal income tax rate is about 5.6%.

If the Bush tax cuts expire, it will cost me a little over $700 a year and my effective tax rate will go up to about 6.2%.

This is why I don’t believe anything any Republican politician says about the economy or taxes.

justamom

“State and local governments are also going to continue to drown in a sea of debt.”

A confirming voice:
Glenn Beck reported yesterday that the economy in the state of California is in worse shape than the economy in the nation of Greece.

JF

Most people go on with their lives oblivious, or not caring what is happening to our country. I try to tell people, but they think I’m crazy. I tell my wife that our teenage kids are probably gonna live with us, as there doesn’t seem to be a future for them. I live in California, which is well on its way to becoming a third world country with the massive illegal immigration from Mexico and Central America (I’m American of Mexican descent). Unlike my ancestors who immigrated legally generations ago, these illegals have brought crime, decay, gangs, overburdened schools and social services. There are areas here which look just like Mexico. California spends 19 billion a year on illegals with no end in sight.

Gary2

Not only do we need to tax rich people more, but we also need to dig up the graves of super rich people from the past, take any jewelry or valuable that they have, and sell them at auction. Our government could then take that money made from selling dead rich people’s jewelry and put it towards studying cow flatulence.

Jeremiah

Can we explore the following a bit more? “…The truth is that the American people have become dependent on the government and they like getting their checks, their handouts and their government contracts.”
IMHO, it is not so much about “like” as about “dependent”. Speaking for myself, I was brought up with certain ideas I was brainwashed that were written in stone: Social Security and Medicare. It was accepted and assumed that you pd your “dues” and collected at the ascribed time. I heard nothing different from my family, school, church, etc. There was no sense of urgency or a hint of a possibility that we needed a plan B – massive savings – because SS and Medicare were going to be bankrupt. My point is that most of us lemmings never had an opportunity to choose a different path. We didn’t receive the info we needed until it was too late. Now we are at the 12 O’clock hour and it is too late to amass enough savings to make up for the loss of gov’t programs. Thus, I guess we will be hanging out at the burn barrels and food lines.

I keep hearing that our children and grandchildren will be paying for our sins. I’ll bet that the disaster happens sooner than that. Check out survivalrealestate.com for a hint as to how you might overcome some of the inevitable problems. I have seen this problem coming for many years.

Karen

OB is a great orator and makes oh so many promises but he is no leader. Instead he leaves it up to the DEMS in congress to take the fall for his failures. Like in the mid terms.
Sad but so true with this debt plus climate change, then add globalization which means more outsourcing which means less and less people paying taxes then add the wars and —-
THIS COUNTRY IS OVER!!!!!

RunVampRun

so much for ” Hope & Change” !

Haid DeSallami

Well I’m having a great time!

Get the ca$h, convert it into something tangible & hide it for the Day of Reckoning.

If things are so bad that a failure is imminet then my recommendation to everyone is to grab as much as you can for yourself & family.

Knowing when to give up & cut your losses is a lesson that is learned at great expense. Wishful thinking (sometimes called Prayer) just isn’t going to do a darn thing for US.

Get what you can, convert it into something that people will need/want/buy & hang on.

Bob Snider

We became the colossus of the world in 142 short years. From the
time of the American Revolution till the end of World War 1 we set
a pace for industrial expansion, population explosion, and land
development never before achieved in human history. We had
the land to expand, the people to settle and build, and the individuals
to invest and create. What we didn’t have was a minimum wage, an
income tax and politicians who made a career of buying votes and
staying in office for a lifetime.

The next 92 years saw a gradual decline in American superiority
and know how, that decline becoming an avalanche the last 20 years.
We now have proposals like the Dream Act. This is nothing more than
politicians, manly Democrats, looking for a voting block that will keep
them in office perpetually.

If we’re going to have an income tax it should be equal and across the
board. Everyone pays an equal percentage of their income and no
one votes who doesn’t pay taxes. Politicians live by the same rules as
all other citizens. No special retirement plans, health care and other
perks. Strict term limits.

I fear these proposals will never be implemented. California is already
over the hill. November elections installed all liberal candidates. The
constituency is voting for those politicians who have already, in reality,
bankrupted the state. Will the rest of the nation follow? Only time will
tell and that is running short.

zack

It’s hardly surprising that Congress’ idea of “compromise” (tax cuts for unemployment) – results in greater spending and deficits. It’s funny now watching the various Congressmen posturing on TV, pretending that they won’t vote for this farce. In reality, they are just positioning for some friendly earmarks or pork. Obviously, the politicians haven’t learned anything from the Tea Party revolt.

Since every dollar in the economy is borrowed and since the only place to get more is to borrow more doesn’t this mean we always owe more than there actually is? The interest?

Games played by the Clinton era folks to make the debt shrink were nice and all, but they could not go on forever and part of the Bush era debt was the rebound affect from this.

And could someone explain how the Fed is purchasing T-bills when according the the Fed’s own website it has to pay any excess money’s it makes back to the Treasury? Does this mean they buy them then give them back?

Griz

Everyone here knows the system is going to collapse. Does it matter whether the deficit has a one with 15 or 18 zeroes after it. Use the extra money to buy canned food, silver
coins and something to protect your family.

john

When I was in college in 1972 I took a government class. The professor said: “you will never change anything by hiring new politicians”. At the time I did’nt really understand this. Now, unfortunately, I do.

Save the Republic

Maria,

The only voting that has a chance of changing things is voting independent. We need to vote for people based on their character, integrity, and desire to do what’s right for the country as a whole, not voting based on “party platforms”. The people in these parties owe their allegience to the party (not the American people), which inevitably owes its allegience to the organizations that lobby them. Unfortunately, the American people (vast majority) have been dumbed down and brainwashed to the point where they believe they can only vote for a demolishcrat or a republicant, so the situation is pretty much hopeless.

Leeroy

“The sad truth, as I have written about previously, is that it is now mathematically impossible to pay off the U.S. government debt.”

This is true with regards to the U.S. government debt, however, with regards to the entire national debt it became true the instant we got stuck with these FRN’s lent out at interest.

The principle of debt money in circulation can never pay off the principle plus interest owed.

There is no solution except collapse and then rebuild. Unfortunately, the politicians will spend us into a prolonged, slow marching, death rather than a quick collapse.

If any of you think differently then you probably can do six grade math.

GMiller

Democacy was doomed when people realized that they could vote themselvbs money out of the treasury. It became even worse when economists discovered that when that ran out, they could borrow and/or print much more.

In my opinion, you are being too quick to write off the US and its people. You live in the greatest country in the world. Your business community and its accomplishments are second to none. And I mean real businesses not those that are paranoid about hitting their quarterly numbers to satisfy stock speculators, and engaging in related chicanery. And not people playing games on the markets.

Unfortunately over the past decades there has been serious regulatory expansion and government interference in almost every area of business. How can businesses increase or even maintain productivity and competitiveness with this unnecessary burden.

Get rid of all this unproductive activity, and watch business performance. And consider the cost saving to governments when they don’t have to staff up to develop and enforce current and future intrusions into the lives of businesses and the people running them. Stop governments from trying to run every aspect of peoples’ lives.

ricardo smalley

I believe that you are right, but not far enough. We must take our medicine now so that our children and grandchildren will not be forced to take our responsibility. It is our responsibility not theirs.

UNFORTUNATELY NOT ONLY OUR PRESENT ADMINISTRATION, NOR THOSE OF THE RECENT PAST, BUT THOSE WE INHERITED FROM ALL THE PREVIOUS ADMINISTRATIONS OF THE PAST 50 OR 60 YEARS THAT BORROWED FOR FUTURE GENERATIONS TO PAY. WE ARE THAT GENERATION. WHEN SOCIAL SECURITY WAS IMPLEMENTED IN 1933, THE WORDING NEVER ALLOWED OUR GOVERNMENT TO BORROW FROM IT, NOR TO LITERALLY STEAL THOSE FUNDS TO BE USED IN THE GENERAL FUND AND PLACING AN I.O.U. IN THEIR PLACE. THIS IS WHY THAT SYSTEM IS NOW BROKE. IT WAS NOT BECAUSE TOO MANY PEOPLE TAPPED INTO THE SYSTEM. WE HAVE BEEN RUNNING THE FEDERAL GOVERNMENT IN THIS MANNER WAY TOO LONG; AND NOW THE STATES SEEM TO HAVE ADOPTED THE SAME INSANE FISCAL MANNER. IS IT ANY WONDER WE HAVE A PROBLEM? WHERE ARE ALL THE GENIUSES WHO ALWAYS HAVE ALL THE ANSWERS TO ALL THE QUESTIONS WHEN THEY RUN FOR OFFICE?

Libertarian jerry

A fine and to the point essay. What we are seeing is the final collapse of the myth that government is there to solve the peoples problems for them. Dismantle the welfare/warfare State and put the government back into the chains of the Constitution. Unfortunately,too many people are on the government gravy train and wouldn’t know how to be self reliant and self disciplined in the great American Free Enterprise System if their life depended on it. We are doomed.

PAUL

Remember:
1. Big deficits started with Reagan and a Republican congress. Reagan never submitted a balanced budget to congress. He said debt doesn’t matter.

2. Clinton submitted budgets that paid down the national debt and he faught the Republicans and shut down the government twice when the Republicans wanted more debt.

3. If Bush and the Republicans had followed Clinton’s example the debt would have been paid off next year.

seafoodie

So while we know that neither of the standard parties are worth spit, didn’t more people vote for any other party listed or for Ron Paul. Too afraid of any possible real change in the status quo???

How about starting with all the “pork” in all the bills congress is always passing.

Kevin Beck

The question being debated between the two branches of the Demopubican (or is it Republicrat) party is whether they can stay in power long enough to pilfer more wealth fron the citizens, or will there be a citizen revolt before they get the chance. However, not enough of them see the problem that the Federal Reserve has created. Instead, they decide to grant MORE power to that group of banksters, while possibly thinking of promoting a useless representative over Ron Paul to head the House Banking committee. Such an event would be the final betrayal of the principles of the Republican party, and would guarantee they will only last for the next two years.

Most Amerikans don’t have a clue how much we owe. I heard of a BU professor who says that we are 120 Trillion in the hole. Do you realize how much that is? No one does.

Maybe we should study the macro-worlds like Astronomy to get a clue. For instance, the star Betelgeuse, in Orion’s right shoulder is so big that the earth, in its yearly circuit around the sun would fit inside this star. That 93 million X 2 = 186,000,000 + a bit more. We owe a bit more.

Ben

Do all of you not realize that the rich only pay taxes, if they should happen want to? They really do not have to be citizens of the US and therefore not taxable.

Mindy

All these comments make us “the individuals” seem like we have a choice in how the governments spends our money. All we can do is vote in, or out, the people we don’t like and hope that the replacement does better. I didn’t get the opportunity to vote on the stimulus bill or the health care bill. I have no control over what the government does. I’m not on welfare, or collecting unemployment. My husband works two jobs and we have developed a home business, and I’m currently in a mentor ship for forex. I’m doing what I can to make myself independent. Don’t blame me for what the government does. It’s the main reason why I don’t tithe the church I attended for a while. The bishop of the church in Michigan was participating in a gay march. I pick and chose what organizations and people I support.

We have no control over what the government does. I don’t want national health care, but I got it. I don’t want to pay for illegal immigrants’ school and health care, but we do. What choice do we have.

James

As always, the Government smiles.

Mike

At last! change in which we can believe plus, at no extra charge, a hockey stick that is made from actual numbers…not contrived by drooling global wamingistas.

Better be getting ready folks. Our families will need everything we can do together to weather this storm.

I was concerned with the deficit when Everett Dirksen said “…A billion here and a billion there, pretty soon you’re talking real money.” I swear that most folks especially politicians don’t realize that the game’s over. When the wheels fall off and we default, the US will not have the money for anything. Entitlements, discretionary spending, infrastructure notwithstanding, we won’t have the money to defend ourselves. The military takes money. We’ll be international patsies. Korea, Taiwan, even Central America – gone. It won’t matter because we’ll be fighting amongst ourselves. We’ll be lucky to survive intact as the US.
And we owe it to ourselves, for 80 years of not questioning “We can’t afford NOT to spend money on this particular small program.

John

The only way out now is to get rid of the Federal Reserve, and put their money into paying off this huge debt.

Gary2

I am flattered that people are posting posts with my name on them. I guess I have quite a following.

Here is the deal and I know lots of people agree:

We need to tax the rich and spread the wealth.

For those that understand this, no explanation is needed. For those who don’t, no explanation is possible.

Gary2

Oh, one more thing-unless it has a genuine avatar picture by my posts it is fake. The picture is me taking back the money the rich have stole from the rest of us.

Wuzzy Warbler

The key point that everybody glosses over is that the dollar is not money it is debt! The US borrows the money from the Federal Reserve, they are no more a Federal agency than Fed Ex, and for every dollar it puts in circulation the tax payer has to pay back that dollar PLUS interest. Where does the money come from to pay the interest you ask? We have to borrow it from the Federal Reserve!! The dollar=Debt not money. Ron Paul wrote a bill to audit the Fed and it has many co-sponsors but Pelosi wouldn’t bring it to a vote well it’s time to bring it to a vote. The Federal Reserve is the corner stone of corruption in the world today not Wall Street or businesses although they contribute their share the Fed is THE corner stone of corruption. Rothchild (father of the world banking system) said (paraphrased) I care not who makes the laws as long as I control the money.

Wuzzy Warbler

Wait till Russia, China, Iran vote out the “Dollar” as the reserve currency” the Mormons are right better have a years worth of food and water stored up and the precious metal will be lead as in ammo.

Erick Tippett

There’s no need for Obama to be a “Manchurian
Candidate” since there is no longer a two party system in this country, he serves as a good display piece for the ‘Republicrat’ party system! As for his one term presidency, I agree with Robert Prechter who according to his socionomics theory will no doubt be replaced by a white female. (Of the right winged, patriotic, american pie variety no doubt,and you can quess who that will be.)

AS far as the consequences of all the lying about history and brainwashing of the masses
in this country are concerned, they are all a part of the cause and effect already in place casting its shadows after fomenting for years on end in this society.

EDT
Chicago, Illinois

William E. (Ed) Fox

Neither Republicans or Democrats are offering long-term solutions to job creation. Capital will only be invested where a reasonable profit can be made. Production facilities in the U.S. cannot make a profit in most cases because costs are too high. Costs to corporations must be reduced by (1) Removing all health, unemployment, and retirement costs. (2) Removing regulations that increase costs. (3) The administration must be friendly to business and not consider large profits to be evil and subject to additional taxes. (4) Unions must start cooperating with businesses in reducing costs and stop demanding more than their fair share of the economy. Unless these cost reductions are made, we will continue to have high unemployment. Corporations may prosper but jobs will continue to go outside the US where profits can be made

a. palmer jr.

The President and the Congress pretend to care about the economy by allowing more money to be printed, extending tax cuts, enacting new tax cuts, etc. but at the same time, they’re voting on allowing amnesty for millions of illegal immigrants who will immediately sign up for welfare, unemployment, Social Security, to drain the U.S. of what little resources we have left. Does anybody in Washington have a brain?

gon4beer

Well so much for the thought that a balanced budget would do any good. On the other hand, the first rule in life is “Do no harm”. Buy gold and silver and lots of it

gon4beer

A brain, in DC?, where re-election concrns reign supreme? You must be joking-I know, it’s all so sad. Ron Paul and Jimmy Rogers have been right all along-Abolish the Fed.

Beck N Call

A fine example of how much people care. Dream Act. Food Safety bill. Anyone know about either of these? Anyone call their Senator or Representative to see how they were voting?
I mean I am just sayin’ it is a good idea to be aware and standing up for what is right don’t you think?
The progressives and communists have a choke hold on our nation. There is only one hope left.
God.

You are right my brother Beck N Call! We are living in the last days my friend! I know this and I pray all the time! Don’t even go to church, but I don’t go to church to put on a fake show like some people do either!

Went to church when I was a kid, and I go anytime I feel the need to be with my lord Jesus Christ! Amen!

Bob Bois

Beck,
“Communists”? “Progressives”?
Since when were the Communists and Progressives running AIG and Citigroup? Do the Communists want to reward the financial class with tax cuts for trashing the economy?
For sure, every citizen should be watching their rep’s vote on issues of import. But, to say communists and progressives have a ‘choke hold’ on America represents a willful disregard of reality. “Standing up for what is right” presupposes you’ve already figured this out for us. I have my doubts…

Here’s a little story on “loopholes”, since we are talking about taxes. Recently I looked into who qualifies for food stamps here in California. Since I’m an Anglo Saxon white male I don’t get crap, but if you are an illegal alien from south of the border you get the full ride! Do you know why? (secret loophole) All you have to do is go to the social service food stamp window, speak Spanish and tell the lady behind the counter you were “trafficed”. That’s right, if you are an illegal from Mexico, tell the food stamp office you came over in a van driven by a guy named Coyote, you get the whole enchilata, pardon the pun. If you are an American white guy, stop your bitchin and pick up a shovel and get to work, you serf.

ChevalierdeJohnstone

In fact the U.S. Federal Government does borrow all of the money that it spends. Tax receipts do not “pay” for anything. Taxes collected are dollars which simply cease to exist. Do you really think the USG has a bank account where taxes are kept for a rainy day? No. All money spent by the federal government is created – that is, it is borrowed. In fact this is the only way to create new money (Federal Reserve Notes).

From a budget-balancing perspective, the only thing taxes do is to deflate the currency by reducing the amount of Federal Reserve Note “dollars” in circulation. This would be a good thing for private citizens concerned about the purchasing power of the dollar…if it were not effected by taking money out of their hands and destroying it. Oh well.

If this were 1880 and the U.S. currency were actually backed by some real, somewhat finite supply of monetary value (e.g. gold), which actually had to be exchanged in order to pay back creditors, then taxation would be a reasonable means of putting more of this finite resource under government control and thus balancing the budget. However, even though government financiers have yet to notice – it is not 1880. We don’t live in that world anymore.

bog white

forget gold and silver…you want guns and lead..lead ammo. add in camping supplies….you better hope someone in your family was a boyscout..or a regular camper…

James C. Petersen

Do you think the 2% social Security will apply to only the wage earner?
With the common notion that the employer “matches” the employee contribution there is going to be a lot of opinions and extra deductions and it will come up to a fight and the employers will win and then we have whacked SS Revenue streams by 1/3. What does that tell you?

Now the popular defense is “they are replacing the 2% from general funds. What general funds? the deficit budget general fund? Will they pay the employer part too?

If that’s all they wanted to do was give the employee a 2% cash boost
why didn’t they say take 2% of the persons wages and take that from the income tax withholding deduction, they would get the same cash boost, but you wouldn’t need the general fund kickback because the income tax withholding is already going there.

THEY WANTED TO MESS WITH SOCIAL SECURITY, they are opening the door to it’s destruction.